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TMI Blog2018 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 03/08/2015 the registration of the assessee has already been declined and assessee has not filed any appeal before the Tribunal. In this respect Learned A. R. invited our attention to the copy of the CIT (Exemptions) order dated 03/08/2015 and stated that this order was passed by learned CIT (Exemptions) ex-parte and in this respect our attention was invited to para No. 2 of the order. Learned A. R. submitted that learned CIT (Exemptions) had fixed the date for compliance on 03/08/2015 and has held that no one had appeared but in fact the assessee did not receive any notice and that is why he has held that no one had appeared. Learned A. R. stated that instead of contesting that appeal the assessee preferred to file application again a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uirement is to examine the objects and the genuineness of the activities 3. Learned D. R., on the other hand, heavily relied on the order of CIT (Exemptions). He specifically relied on para 2 of the order wherein CIT (Exemptions) had noted that assessee had not provided any bills and vouchers and had not provided any books of account. Learned A. R. in his rejoinder invited our attention to the copy of query letter dated 23/06/2016 and invited our specific attention to point No. 12 wherein CIT (Exemptions) required the assessee to produce documents, bills and books of account etc. Learned A. R. invited our attention to copy of assessee's letter addressed to CIT (Exemptions) dated 26/07/2016 wherein vide point No. 12 it produced all papers i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was not registered u/s 12A of the Act. The arguments of Learned D. R. that the assessee had not produced books of account and vouchers is not having any force in view of the copies of query letter and its reply placed at pages 41 to 45 of the paper book. At the time of registration, the CIT (Exemptions) is required to examine the objects of the assessee which in the present case are entirely charitable as the company is section 25 company. The case laws also support the contention of Learned A. R. Hon'ble Allahabad High Court in the case of CIT vs. Red Rose School [2007] 212 CTR (All) 394 has held that CIT (Exemptions) has to satisfy himself about the genuineness of the activities of the trust and also the objects of the trust or ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble institution from its charitable activities, may be a ground for refusing exemption only with respect to that part of the income but cannot be taken to be a synonym to the genuineness of the activities of the trust or the institution. This is more evident if we see the provisions of Section 11, which, while exempting the income given in its various subclauses from being included in the total income of the previous year of the person in receipt of the income, for example, in subclause (i) says 'income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and where any such income is accumulated or set apart for application to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (b) are complied with. 24. Sub-section (3) again says that if any income referred to in Sub-section (2) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or ceases to remain invested or deposited in any of the forms or modes specified in Subsection (5), or is not utilised for the purpose for which it is so accumulated or set apart during the period referred to in Clause (a) of that sub-section or in the year immediately following the expiry thereof, or is credited or paid to any trust or institution registered under Section 12AA or to any fund or institution or trust or institution registered under Section 12AA or to any fund or instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a charitable purpose and, therefore, while considering the registration under Section 12AA, the scope of enquiry of the CIT, would be limited to the aforesaid extent. 27. Since in the absence of such registration, the trust or the institution would not be entitled to claim any exemption of the income derived, though it is being run for charitable purposes, the registration has to be considered in the light of the specific provisions aforesaid and in the manner that it furthers the object of the scheme of registration and, of course, exemption of the entire income or the part of the income, as the case may be, of a charitable trust or institution has to be considered during assessment proceedings. 28. It is significant to mention that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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